Square foot prices have tripled in the last three years, with space shortages adding to retailers woes.
First came political misgivings and then street protests by small-store owners across India, fretful they will be put out of business by the deep pockets and discounting power of retail chains.
But that perhaps didn't worry Indian tycoons as much as the surge in rentals and space shortages they are now battling in a bid to open thousands of stores and change the way the subcontinent shops.
In the glitzy, glass-and-steel malls that dot Indian cities or are being built, square foot prices have almost tripled in three years, according to retail consultant Arvind Singhal.
"Rentals have shot up to a point where very few retailers will make a profit," said Singhal, head of the consultancy KSA Technopak, who says retail chains may have to slow expansion.
"Retailers don't want to get into a mall it if there's no financial viability, so a lot of current retailers and likely new entrants are putting their growth plans in review mode," he said.
Mall rentals shot up as an economy expanding 9% a year drove up land valuations and rising prices of steel and cement forced developers to pass on the increased cost of construction to tenants.
Retailers may get no relief until more space comes into a market in which 250 malls are under construction, on top of 300 that have opened this decade in what pundits call the "great retail gold rush."
"The share of real estate in the cost of our operation is increasing, and that is certainly a very unhealthy trend," said Bijou Kurien, a senior executive at Reliance Retail, an arm of India's biggest conglomerate.
"Sometimes you find that the cost of space being sought is so high that it doesn't make business sense for us to go into a particular mall," Kurien said on a recent visit to Bangalore in southern India.
The cost and space problems have been largely obscured by political reservations and street demonstrations against retail chains in a market dominated by 15 million mom-and-pop stores.
Reliance, the most aggressive retail player with plans to spend six billion dollars on a giant chain of convenience stores, supermarkets and hyper-markets, has suffered the most.
In Uttar Pradesh, India's largest state, the government ordered Reliance to close its stores after attacks by traders.
The Marxist governments in West Bengal and Kerala are opposed to organised retail, which accounts for less than 5% of the consumer market in a nation of 1.1 billion people.
Annual consumer spending is estimated by the consultancy McKinsey at 370 billion dollars and forecast to quadruple to 1.5 trillion dollars by 2025, as a youthful population earns more and millions climb out of poverty.
That has lured business groups such as Reliance, Tata and Aditya Birla into retail, only to find there is a heavy price to pay.
"If rentals were expected to be in the range of 60 to 75 rupees ($1.5 - 1.9) per square foot per month three years ago, the same malls are now expecting 150 to 200 rupees," said KSA Technopak's Singhal.
"Some mall developers are quoting 400 to 600 rupees - a rate at which no retail business can make any money," he said.
In New Delhi's luxury mall DLF Emporio, reputedly India's most expensive, tenants have to pay 900 rupees, real estate consultants said.
And it's not easy finding the right space in the right location for retailers, who also complain that many malls are badly located and designed, as well as shoddily managed. Many developments are behind schedule.
Ajit Joshi, who heads Infiniti Retail, part of the Tata group, would love to open an outlet in downtown Mumbai as he expands the Croma chain of stores selling consumer electronics and durables.
"What we want is about 15,000 square feet of space, but we won't get it even if we are ready to pay," Joshi said. In other areas, "if you are lucky and space is available, the rates are so exorbitant it becomes unviable."
Some mall rentals have risen by 50% in the past year, and developers are trying to wriggle out of old lease agreements under which tenants were offered cheaper space, said Pranay Vakil, India head of property consultancy Knight Frank.
Developers are today in a position to quote a price and tell retailers to "take it or leave it," he said.